be. >> bridges contingency bye like west portal it is about city and san francisco may have a big name but a small city and a lot of small communities shop and dine in the 49 highlighted that and reminded people come outburst and i love that about this city i'll always be a >> city of san francisco >> >> good afternoon, everyone, thank you for joining us today. this is the regular meeting

for the budget and finance committee. my name is supervisor malia cohen:. to my left is >>supervisor katy tang: and >>supervisor jane kim: and we'll be joined by supervisor yee. >> ms. wong, any comments? >> yes, please silence all of your electronic devices. item no. 1. >> hearing on the proposed 5-year financial plan and the mayor's office to report. >> supervisor malia cohen: we'll

be hearing from the mayor's office and the legislative analyst report. with that, i would like to turn to the mayor's budget office to kickoff the hearing. thank you. >> sf govtv please turn the mic on. >> thank you members of the budget and finance committee. i'm the budget director and we have the controllers office. and dan from the budget and legislative analyst office and all three of us are available to take any questions that you may have on this presentation. as you all know, we put out the 5-year financial plan in december, the draft and now we are writing an update to that report. and, we actually just presented a few weeks ago the report from this december. we have a little update for you today. this presentation will cover the march report

update, specifically the deficit projection, the drivers. risks, recession scenario and federal and state funding and end our presentation with a note about our upcoming budget and the budget office. this is an update from the fall report. all three financial offices, the mayor's office, board of supervisors and controller get together and put together these numbers and they stand for projections. if we make no policies changes and we project them forward with reasonable financial sound for inflation, what would our revenue and expenditures be and our deficits and surpluses. our report is projecting deficits. we'll explain why. the budget that we will be balancing and submitting to you all on june 1st, the

deficits have gone down and in the 3 years they have gone up slightly and we'll go into why that is because that is something we are paying close attention to. the cumulative define assist is not 288. this deficit assumes the midyear rebalancing plan as well as changes to the free city college program and the public defenders office that we have discussed with the board of supervisors. there are no loses from the state or federal government assumed here. and as a reminder from the federal select committee, 20% of the city's revenues are from state and federal sources. we think there is too much uncertainty at this time to make any clear conclusions on what type of funding might be lost and we will continue to work with the federal committee on that. here is a table showing the very high level numbers which i'm going to spend a couple minutes on. the first line shows you revenue projected from the current

year 16-17 budget through fiscal year 21-22. we are showing projecting growth $541 million from where our budget is today and this is all general fund revenues. on the expenditure side, expenditures will go up by $1.4 billion. >> i'm sorry, one more time and a little bit slower. going back, baseline reserve is that fiscal year is 54.1. >> yes, let me go through each. the high level is the sources and the uses line. the sources line is showing you a positive number is good, a positive number of growing revenue, a negative number is parenthesis is bad. if you take all the uses together that would get you to 144.847. if you add that $1.4 billion

in expenditure growth to the positive 100 million revenue growth that would give you the projective growth. these are cumulative numbers. this is assuming that all cost grow in cumulative way so, for example in salaries and benefits that city employees have a cost increase or wage increase every year at the cost of either a negotiated contractor inflation. that negotiate contract is 2 years with the extension that you heard about which is about 3% in each year and out years we assume inflation. one of the years is inflation is projected to increase.. that's one change. and then for your question on baseline and reserves, this is for 15-16 to $100 million today about 15%

of expenditure growth of projected $1.4 billion. salary is expected to grow $1.2 million. citywide cost is projected to grow by $450 million. and departmental cost about $52 million. >> any questions on any of that? >> no. thank you. >> just a note now on what are the big highlights are this compared to december. the most important thing is we started with a projected deficit for the upcoming 2 years about $402 million. then the 6-month report came out one time savings in departmental and revenues about $54 million. that brought up our updated projected shortfall to 48. this brings it down

by 60 million. the biggest things are one time revenue on the fund balance and the capital draft when we put out this report and we didn't know what the debt schedule would be and the new debt schedule on the capital plan put back specifically the jail replacement project. instead of hitting the next 2 years for that project, it's now been pushed out and put on hold as the city figures out what are the next steps on that project. that means basically the next 2 years there is less cost depending on whether or not the city moves forward would be out on the out years. that is one big change on the first 2 years. we also thought it was important to call out your five because your financial offices are very concerned about the long-term structural picture. it went down in the fifth

year and the same amount in the first two. a large part because of some debt service cost are pushed out and a lot are one time thing. one time fund balance, one time savings and things that help us right now but are not on going. that's part of what's going on here and in the out years, some of our cost went up with inflation projected to be about 3% in the out years and now projected to be close to 3.5% in the out years. also because of the uncertainty in the affordable care act, the house is telling us because of the percent in growth for 7% for retirees, we should project 8% for active and 9% for retirees. we are projecting a significant increase around employees for their healthcare benefits. those are the things that push the out years number up even though the next two

budget years went down. any questions on any of that? >> no. >> i'm going to hand it over to michelle. >> good afternoon, michelle, controllers office. so this is a 5-year financial plan that we have produced. and this table is just showing you that in the year that that plan was produced, that the tale year of the projection, the deficits have been coming down and in our most recent report which is the darker green bar our deficit projection has increased for a number of reasons. the first is where we are in the economic cycle. we kind of reached a period of slow growth of plateauing slow growth and we are seeing decline in some of our revenues such as parking tax, sales tax is

quite flat, etc. so that's the thing on the revenue side. at the same time, health and pension cost are growing much more than rapid inflation. instead of increasing interest rates, a lot of macro economic reasons for that. another reason that i will get to in a second as well is the growth in spending a voter mandated through baseline and set aside through ballot and approved by voters that constrain future choices and increase our cost. as mentioned a use of one time fund balance not available in subsequent years. so, i think this chart is worth spending a little bit of time on. what we are trying to show here is the thin black line at the top of the

chart at the nominal value of projected revenue growth. an we are saying, let's look at the things that are soaking up that revenue growth because we are not projecting a recession because we don't do that and we wouldn't do that. but we do project modest revenue growth and there is a couple of large cost types that are absorbing most of that growth in revenue. the dark shaded area at the bottom, those are cost increases that are the result of voter approved measures. the value of those, by the fifth year of the projection taking up about 45% of the revenue growth. the next sort of the middle blue section is growth in employee benefit cost. so pension and health especially health increasing several times at the rate of

inflation, not only for current employees but retirees as well. the portion of that left over for any other type of expense includes employees or cbo colas or investments in technology or other things the board might choose, new programs or expanded services. the amount of revenue growth available beyond that is that very light blue section. it's very limited, about 9% of the growth, but that fifth year is available for all other uses aside from these two kind. and i did mention that our report, we don't predict a recession because nobody can. it's not something any economist would do even. i think we've shown this chart before. what it says if we look at whenever -- where we are in the

economic cycle, are we going to get out of the 5-year period without a recession. we don't think that's really likely if we look at the past 100 years of history. each one these blue bars is the economic recovery. we started in june 2009. it's actually a little bit longer because this chart is maybe about 5 months old. what it's showing is we have already passed the average. if we don't have a recession in this time period, it would be the longest recovery that we've measured and the question is whether you think it's likely or not. but nobody can time it, but our experience says we should be cautious but nobody can predict it

with certainty. so, to give a framework for what that could mean, we looked at, we did a recession scenario where if we did have a recession to begin at the end of the fiscal year and the loses in revenue were similar to the loses in the last two recessions if the rates have declined like the last two just for economic, that we would estimate a revenue shortfall about $960 million. the city has taken steps is to build the economic stabilization to

help -- cushion this. as there is a lot of uncertainty at this time especially with the federal proposals and we discussed last week at the committee of how little detail there is available. really in the president's skinny budget is what we can attach a number to is the limitation of cdbg home grants which is about $21 million to the city if they come true. and we'll have more information in may when his updated budget is proposed and of course that will go through congress and be approved back to refer possibly although they don't have a very timely process often. we do know a

little bit more about state proposals and we talked about this at our morning hearing this morning. the governor proposed in this january budget the elimination of issf maintenance effort which next year will be worth about $40 million and probably 60 in this period. county is in negotiations with the governor about this and we'll have more information about what agreement can be reached around may 10 when the may revise comes out and it's something that county has been working on very diligently with the governor's office and a voting on ab 1, a proposal increase for taxes to pay for resurfacing and for transit projects. right now the city pays for a lot of

it's road resurfacing and san francisco is subsidized by the general fund and will be by $21 million and 20-30 for transit projects as well. that will be a great resource for the city if it were to pass. our next update will be probably around may 9 or 10. we'll be looking at the current year revenues and expenditures and updating those for you. after that we'll be doing budget balancing with the mayor's office. >> thanks michelle. just to end the presentation with this last slide for contact with the upcoming budget. we are waiting for the controllers report because that is the last big piece for us around balance to tell us if there

is any additional savings from current revenue or departmental savings that will augment our balance further. that will be in early may. we are waiting for that and i want you to know some of the bigger picture things we are talking about. several weeks with the mayor we are having meetings around the budget and we are reviewing and many of the departments did meet our target reduction of 3%. we are reviewing all of those. we are definitely preferring or giving preference to things that are relevant solutions, efficient proposals, we don't want this to be a reduction year and working hard with the departments. some departments also submitted lots of request for new things and we are working on those. the big thing we need to focus on this year is this larger uncertainty in mind is

we are in a very weird point right now. we don't want people to be unnecessarily worried or panic but there is so much uncertainty with state and federal and particularly in our own economy. we are starting to see signs of slowing, not a recession, not seeing anything terrible on the horizon but a very odd point in time. what we are thinking at this point in budget are several things because the situation is uncertain with the federal government and whether we need more reserves as a result of that. when chair cohen asked about the ihhs and the city had a reserve years ago. we need to talk about meeting a lot of our fund investments with capital and technology. this is a very different fiscal picture. we can lower that without reduction.

and also all of those things when you spend the money, they save in the long-term. trying to prioritize those. as i said to you all before, we've grown a lot in the last 5 years in the f te's and to the budget, but we are really mindful of where we might be for now. and any new investments that we are going to be seeing in this budget is very small and not huge because we want to be careful of starting anything new this year and also ask departments not to submit any fte requests to us. right now the mayor is concerned about affordable housing and homeless. and that's kind of the preview for june 1st. of i will come back to you once the budget has been

submitted with all the details included in the budget. if you have any questions, please let me know. >> thank you very much for the sobering reality. let me check with my colleagues to see if there is any questions. supervisor tang? >>supervisor katy tang: thank you, going back to slide four, the summary of the increase over 5 years with salary and benefits and the the cola adjustments for the next 4 years. does this assume there is no fte growth over this period? >> it does. >> okay, i have spent a lot of time thinking about base lines and reserves and how that has pretty much tied our hands this terms of future budgets and salary and benefits and it's percentage of growth. it's just so much more, 51% growth over the 5-year period. so, i know it's always hard to talk about cutting

staff or not growing staff as well, not increasing fte's, and we don't have to get into a full conversation here but at the next hearing, it's important for us to have a deeper discussion around what we might want to see around fte reform and so forth. >> it's a good plan. the fte's are what's driving up this cost of inflation. that's a good report. >> thank you, supervisor yee? >>supervisor norman yee: thank you for the presentation. when you talk about not increasing the fte, one program comes in mind where it's the maintenance of the trees. so, i mean, what we want to do, we need to increase the fte's, this seems

to be a contradiction. >> great question. when we say no new s te's, no new to the plan. you will see growth in the public works and homeless department to near the bound. yes, there definitely is going to be large e growth. >> thank you for the clarification. >> thank you. anyone else, colleagues? all right, thank you very much for your presentation. we'll see you soon. any members of the public that would like to come up and speak on this item, please come on. welcome. public speaker: this process, good evening, supervisors, and a couple of you i haven't met before. let me cutoff my stuff here. i'm sorry. it's quite a pleasure to be here in the beginning of a process that i'm going to be here until my voice is heard. as you see i'm ace on the

case, but i'm here as the czar about migration. but i'm also here to check on ed lee and the controllers and this budget. i hear you talking about this and what about the black folks, i hear about cuts here and all that, what about the black folks? i'm here to find out about ed lee and the controllers and where on the budget line does it mention anything about black, african american or negros? where in the budget does it say there is going to be money set aside for the migration. that hasn't happened for 5 years. unless somebody do something this year, i'm going to protest against this budget to say neglect of african americans purposely. ch now, if ed lee doesn't want to do that, i'm traveling you can to sacramento first.

and actually gave in, you know the institution that you put on migration? not a dime. we were in the $500 million deficit. we are in a big budget now. there is no money to spend on african american blacks. it's been hidden on under privileged people. but it's said on asians, mexicans and migration. you spent millions of dollars protecting these people. i'm tired. whoever is watching and the mayor is watching. >> all right. thank you. okay. thank you. for the folks that are listening at home, today's purpose is a 5-year financial plan update. any

other member of the public that would like to speak. seeing none, thank you. >> all right. may i have a motion, please? >> i will make a motion to continue this hearing to the call of the chair. >> second by supervisor kim. without objection it passes unanimously. all right, is there any other business before this body? >> there is no other business. >> thank you, this meeting is adjourned. [ meeting is adjourned ] >> >>

>> we think over 50 thousand permanent residents in san francisco eligible for citizenship by lack information and resources so really the project is not about citizenship but really academy our immigrant community. >> making sure they're a part of what we do in san francisco the san francisco pathway to citizenship initiative a unique part of just between the city and then our 5 local foundations and community safe organizations and it really is an effort to

get as many of the legal permanent residents in the san francisco since 2013 we started reaching the san francisco bay area residents and 10 thousand people into through 22 working groups and actually completed 5 thousand applications for citizenship our cause the real low income to moderate income resident in san francisco and the bayview sometimes the workshops are said attend by poem if san mateo and from sacking. >> we think over restraining order thousand legal permanent residents in san francisco that are eligible for citizenship but totally lack information and they don't have trained professionals culturally appropriate with an audience

you're working with one time of providing services with pro bono lawyers and trained professionals to find out whether your eligible the first station and go through a purview list of questions to see if they have met the 56 year residents arrangement or they're a u.s. citizenship they once they get through the screening they go to legal communication to see lawyers to check am i eligible to be a citizen we send them to station 3 that's when they sit down with experienced advertising to fill out the 4 hundred naturalization form and then to final review and at the

end he helps them with the check out station and send them a packet to fill and wait a month to 6 weeks to be invited in for an oral examine and if they pass two or three a months maximum get sworn in and become a citizen every single working groups we have a learning how to vote i mean there are tons of community resources we go for citizenship prep classes and have agencies it stays on site and this is filing out forms for people that are eligible so not just about your 22 page form but other community services and benefits there's an economic and safety public benefit if we nationalize

all people to be a citizen with the network no objection over $3 million in income for those but more importantly the city saves money $86 million by reducing the benefit costs. >> thank you. >> i've been here a loventh i already feel like an american citizen not felt it motorbike that needs to happen for good. >> one day - i pledge

allegiance to the flag of the united states of america and to the republic for which it stands, for liberty and justice for all. >> you're welcome. >> (singing). >> (clapping.) >> introduce the san francisco field officer director ribbon that will mirror the oath raise your hand and repeat the oath i hereby declare on oath repeating. >> citizens cry when they become citizenship to study this difficult examine and after two

trials they come back i'm an american now we're proud of that purpose of evasion so help me god please help me welcome seven hundred and 50 americans. >> (speaking foreign language.) >> she wants to be part of the country and vote so much puppy. >> you know excited and as i said it is a long process i think that needs to be finally recognized to be integrated that is basically, the type of that i see myself being part of. >> out of everybody on tv and

the news he felt that is necessary to be part of community in that way i can do so many things but my voice wouldn't count as it counts now. >> it's everybody i hoped for a bunch of opportunities demographics and as you can see yourself there's a good life for everyone. >> that's why. >> you have people from all the walks that life and they're standing in water 8 hours to be an american citizen and

contribute to the city and that's really what makes this worthwhile. >> ♪ ♪ >> 7 and a half million renovation is part of the clean

and safe neighbor's park fund which was on the ballot four years ago and look at how that public investment has transformed our neighborhood. >> the playground is unique in that it serves a number of age groups, unlike many of the other properties, it serves small children with the children's play grounds and clubhouses that has basketball courts, it has an outdoor soccer field and so there were a lot of people that came to the table that had their wish list and we did our best to make sure that we kind of divided up spaces and made sure that we kept the old features of the playground but we were able to enhance all of those features.

>> the playground and the soccer field and the tennis fields and it is such a key part of this neighborhood. >> we want kids to be here. we want families to be here and we want people to have athletic opportunities. >> we are given a real responsibility to insure that the public's money is used appropriately and that something really special comes of these projects. we generally have about an opportunity every 50 years to redo these spaces. and it is really, really rewarding to see children and families benefit, you know, from the change of culture, at each one of these properties >> and as a result of, what you see behind us, more kids are playing on our soccer fields than ever before. we have more girls playing sports than we have ever had before. [ applause ] fp >> and we are sending a strong

message that san francisco families are welcome and we want you to stay. >> this park is open. ♪